For organizations, diversity pays off. Empirical research has shown that diversity increases creativity and innovation and promotes better decision making because it spurs deeper information processing and complex thinking.

In a new report, an international research team led by APS Fellow Adam Galinsky (Columbia University) reviewed the available scientific research on the economics of diversity, concluding that “diverse groups of people are simply more effective at responding to dynamic contexts and unforeseen challenges.”

“Homogeneous groups run the risk of narrow mindedness and groupthink (i.e., premature consensus) through misplaced comfort and overconfidence,” Galinsky and colleagues write. “Diverse groups, in contrast, are often more innovative and make better decisions, in both cooperative and competitive contexts.”

Although diverse groups may be better for business, interacting with people from different backgrounds also has the potential to generate mistrust, resentment, and conflict.

“The amount of diversity, however, is often limited by structural factors and psychological forces that produce bias—even when that bias is unintentional,” the researchers explain.

In order to help organizations set policies that reap the benefits of diversity, while minimizing the potential downsides, Galinsky and colleagues have developed a set of recommendations to help organizations and policymakers. These recommendations appear as part of a special section in Perspectives on Psychological Science that highlights how findings from behavioral science can provide actionable solutions to societal problems.

According to Galinsky and colleagues, organizations can implement specific policies that increase diversity—racial, cultural, gender, and more—by promoting equal treatment of all employees:

– Transparency: Public monitoring and reporting of hiring practices and salary rates creates accountability and decreases bias. Regular reviews of hiring, mentoring, and promotion criteria help ensure that they are fair and equitable for all staff. For example, studies have found that transparency procedures are positively associated with higher productivity, greater innovation, and less employee turnover.

– Inclusive Communication: Underrepresented individuals often forgo opportunities with organizations they deem unwelcoming. For example, masculine language in job advertisements (e.g., dominant, competitive) lowers the appeal of these jobs for women, not because women feel they lack the skills but because they feel they do not belong. Consideration should be made to ensure that recruiting materials and job postings aren’t unfairly targeted towards specific groups.

– Framing: Ensuring that multiculturalism and diversity policies are framed inclusively, highlighting the benefits for both minority and majority group members, is key to minimizing resistance and increasing support for organizational diversity efforts among majority group members.

– Equal Opportunities: Bias, whether intentional or not, can lead to discrepancies in people’s compensation and promotional opportunities. Procedures that create accountability reduce the pay gap for women, ethnic minorities, and non-U.S.-born employees. Mentoring programs are also particularly effective when they are inclusive of all employees, benefiting minority groups without creating perceived exclusion of majority groups.

– Perspective Taking: Imagining the world from another’s vantage point also helps with effectively managing diversity. Perspective taking by majority group members decreases stereotyping, reduces racial bias, increases recognition of racial discrimination, and promotes smoother interracial interactions. Perspective taking in diverse teams has also been linked to higher levels of creativity and better decision-making.

The way that organizations frame these policies can determine whether policies are seen as positive or negative. One key to minimizing such resistance and increasing support for organizational diversity efforts among majority group members is to ensure that multiculturalism is framed inclusively, highlighting the benefits for both minority and majority group members.

“The key is to find ways to maximize the gains and minimize the pains of diversity—to harness innovation and economic growth without producing counterproductive forms of conflict,” the authors conclude.